Dec 18, 2018
The food processors’ association AIFPA has demanded tax on agri-produce processed at a primary level be exempted or lowered to encourage the sector and boost farmers’ income; this has come ahead of the GST council meeting.
According to All India Food Processors Association (AIFPA) President Subhod Jindal, there are at least a dozen categories of products like pulp and concentrates, pickling, frozen foods and vegetables, as also dehydrated onion and garlic powder that attracts GST of 12 to 18 per cent at present. He added that the Goods and Services Tax (GST) rates on these categories should be exempted or brought down significantly.
GST tax levels are still a problem. There was some relief as the tax rates were brought down in some products after the intervention by the food processing minister. There are a few more products on which taxes are required to be reduced to protect the industry.
Stating that 80 per cent of the country’s food processing is done by micro, small and medium enterprises, he said the GST rates need to be rationalized accordingly to bring down the wastage at farm gate and increase the income of farmers.
Amit Dhanuka, former AIFPA president said if you just add salt and turmeric as preservative to a cut mango for making pickle, then also a GST of 18 per cent is levied. Similarly, if salt or ice is used to increase shelf life of a fresh fish, then also the same tax rate is levied. He added, there should not be any tax during the primarily processing of any items. It is not a final product and not into retail package.
Among food processing products, around 47 items attract zero tax, 52 products are under 5 per cent GST category, 25 products under 12 per cent category, 23 products under the 18 per cent and three items under the 28 per cent tax category, as per the official data.
The GST council meeting is scheduled on December 22.